By Tomek Jankowski
The year was 1996: Alanis Morissette and the Smashing Pumpkins dominated radio—we still listened to radio back then—while your Internet 1.0 experience began when your dial-up modem screeched for 20 seconds and then connected you to your AOL account. You had mail! It was in that year that Episode 7 of the fourth season of the popular SciFi drama The X-Files aired, during which a conspiracy was laid bare in a secret meeting by powerful men:
CIGARETTE-SMOKING MAN: What I don't want to see is the Bills winning the Super Bowl. As long as I'm alive, that doesn't happen.
JONES: That'll be tough. Buffalo wants it bad.
CIGARETTE-SMOKING MAN: So did the Soviets in '80.
Of course! To native Buffalonians, this revelation was obvious. How else could anyone explain the Buffalo Bills being the only team in NFL history to lose the Super Bowl four years in a row (1990-1993)? In reality, Buffalonians understood that The X-Files was a fictional show.
BUT STILL, IT FELT COMFORTING TO HAVE SOMEONE TO BLAME.
The financial services sector is currently undergoing a similar streak of almost unbelievably—certainly historic—"bad luck." A Pandora's box of woe was opened in 2008, and ever since then, the blows just keep coming. There's new regulations; new technologies; shifting markets; consumer activism; growing consumer demands; some activist regulators; and a limping global economy.
And even when there's good news, it's usually shadowed by some ill omen, like the unparalleled rise of middle-class consumers in emerging markets—but nearly every one of whom now has the same expectations of product quality and service delivery their peers in the more developed world have, while local governments are working to capture taxes and regulate their local financial services sectors as vigorously as their peers in London or New York. And all this is being born by an industry that, prior to the 2009 crises, was more technologically and organizationally prepared for 1950 than 2014.
DISRUPTION CAN BE PAINFUL.
Which begs the question, why would any company embrace disruption? It's becoming more common to see Chief Disruption Officers, or—using a euphemism for disruption—Chief Innovation Officers. Is their job to sabotage operations or pricing models? Encourage key employee defections? Maybe help foster some new technology that will undermine a major product line? Move key elements of the supply chain to politically or geologically unstable regions? Like Bills fans, are companies just looking to have one neck to throttle when disruption pays a visit?
Disruption can be a tricky thing. It has a habit of showing up whether anticipated or not. Is there a way to institutionalize disruption, to immunize a company somehow by encouraging disruption from within? Or do you build the leanest, most effective service delivery organization possible while listening to your customers? Can you plan for disruption? Think Fukushima, 2010. As General Dwight Eisenhower said: "In preparing for battle I have always found that plans are useless, but planning is indispensable."
Since we don't know what tomorrow will be like, perhaps the best approach is for banks, insurers and others to be at the top of their game and moreover convince their customers that they are well served.
Tomek Jankowski is a Senior Analyst and Financial Services Research Lead for KCRA.
© Arc, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to TMSalesOperations@arc-network.com. For more information visit Asset & Logo Licensing.